REVEALED: Australia's Leading Discount Department Store

In what may be a shock to some Aussie shoppers, and there big-name rivals, Costco has been named our leading discount department store, scoring a customer satisfaction of 88.6 per cent in July.

Roy Morgan's latest research shows the warehouse giant just ahead of Target on 88.5 per cent and Kmart on 88.4 per cent.

Roy Morgan's CEO Michele Levine revealed Costco is the third discount department store after Kmart and Target to take out the coveted award this year.

'Costco's victory came by a whisker with a customer satisfaction rating of 88.6 per cent was only a hair's breadth ahead of rivals Target and Kmart,'

'It comes as the American retailer has unveiled plans for an ambitious expansion with a huge new distribution centre set to open in Sydney's west next year signalling an expanded online retail presence.'

The most improved was Best & Less, which scored a customer satisfaction rating of 86.4 per cent, rising 1.8 per cent within 12 months.

Costco increased by 1.7 per cent and Target by 1.5 per cent.

Ms Levine believes the high customer satisfaction ratings of leading department stores highlights how seriously they take the threat of online monster Amazon seriously.

'Amazon recently became only the second company to top a market capitalisation of $1 trillion,' she explained.

'In an increasingly competitive environment with discount department stores facing increasing competition from online retailers such as Amazon, the big two department stores Myer and David Jones, specialist niche retailers and of course each other, maintaining a high level of customer satisfaction and building a reputation of trust is key.'

The research was based on interviews conducted face-to-face with over 50,000 Aussies, including over 9,000 interviews with people who shop at a discount department store in an average four weeks.